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What is the Chancellor's plan for transport?

Former campaigner's picture
philip hammond

Much has been made of the difference in style between Philip Hammond and his predecessor, George Osborne. Gone were the lists of massive new road projects the former Chancellor so enjoyed, but what kind of vision emerged in their place?

For transport, first up was something which on the face of it could have come straight from the Osborne play book. He announced a decent sized chunk of money for local authorities to tackle road congestion and specific funds for trunk roads, the midlands and the north. But rather than announcing the money would be used to build a load more roads, there are a few small hints of a change of tack at the Department for Transport (DfT). The £1.2bn announced in January for local roads arguably had as much to do with mending the roads we already have than building big new ones. The newly announced £690m (if it is new money) needs to go further in this direction, focusing on genuinely congestion busting measures that give people a real choice in how they travel.

That kind of initiative would also fit neatly into the package of measures needed to tackle the country's toxic air. The Chancellor was expected to take an important step here in introducing a diesel scrappage scheme for the oldest and dirtiest engines. In actuality, nothing of this sort has come forward although there are rumours the Chancellor may now be lining up changes for the autumn. This is disappointingly tardy given the scale of the problem and continues the Government's lamentable record in taking decisive action. 

Also essential in tackling congestion and cleaning up the air we breathe is reform of the freight market. Here, the Budget brought mixed news. There are encouraging signs that HGV charges will be reassessed after consultation, but the Chancellor has undone any good here by removing support from rail freight. In doing this, Hammond has at a stroke tipped train-loads of freight off the tracks and on to the roads. These grants compensated the rail freight industry for the market distortion whereby lorries pay less than a third of the costs they impose on the tax payer in terms of crashes, congestion, road damage and pollution. There loss will be keenly felt and the Chancellor must now urgently look at measures to make freight more sustainable. 

Departmental spending plans got no mention in the Budget, but a look at the details reveals some cuts. Comparing allocations announced for DfT and Communities and Local Government with those from the 2016 Budget report shows planned transport spending being cut by £6bn (8 per cent) across both resource and capital headings. Despite the new money for social care, local government funding continues to take a pounding with further cuts announced between 2016 and 2021.

Elsewhere, on devolution, there was confirmation that government is in discussions with Greater Manchester on future transport funding. Driverless cars will be amongst the beneficiaries of a £270 million fund to respond to disruptive technologies and there is a commitment to developing 5G digital coverage on roads and rail in line with NIC Connected Future report 

Finally, a bizarrely high profile was given to the announcement of free transport for grammar school children who are eligible for free school meals. While welcome for the small number of pupils who will benefit, this only draws attention to the utter mess much of the rest of school transport is in. In the absence of ringfenced funding, local authorities are cutting back school transport more and more. Nearly 80 per cent of local authorities have reduced school and college transport since 2010 with huge impact on families. Outside London, 300,000 children and 50,000 young people have lost their transport to school or college since 2008. 

To address this, we are calling on the Government to extend the statutory eligibility for free school or college transport to age 18, and to use the Bus Services Bill, currently making its way through Parliament, as an opportunity to commit to publishing a Bus and Coach Investment Strategy, including a strategy for the future of school and college transport.

Phillip Hammond's approach to transport is in one sense a welcome break from his roads obsessed predecessor. But that on its own is clearly nowhere near enough to improve our transport. We still urgently need market signals that help people make good decisions, a tax regime that recognises the seriousness of issues like air pollution and climate change, and funding allocations that support choice in how people travel. There is a long way to go.